Jimmy Damon warns the American bond market

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Jimmy Damon has warned that the American bond market “will crack” under the country’s growing debt, as the Donald Trump administration called for America to put a more sustainable path.

“You will see a rift in the bond market.” He added, “I tell you that this will happen. You are going to panic. I will not be fine.”

Warning from the head of the largest bank in the United States about risk escalating on American bond market – which puts borrowing costs for dollars in the world – confirms how Wall Street grows increasingly about high levels of government debt. This comes at a time when Congress reviews the Trump Budget Budget Bill “The Great and Beautiful”, which if it is widely passed, increases the federal deficit significantly.

Even before the introduction of the legislation, which was voted on by the House of Representatives Last week It is under review in the Senate, the Congress budget office had expected to exceed the debts of the United States as a share of GDP peak in the afternoon in the coming years.

The US bonds have been subjected to pressure on financial concerns, as treasury revenues are traded for 30 years at about 5 percent of a little more than 4 percent at the beginning of 2024. The United States stripped From the triple credit classification a.

The treasury bond market grew from about 5 meters in 2008 to 29 million dollars today, as the government reduced taxes with increased spending – especially during the Corona virus. The market is the deeper and most liquid in the world, and it has long benefited from the dollar’s ​​concession as it is the world of reserve.

But with the high debt burden, the demand also achieved great success. Foreign investors have steadily declined from the treasury market over the past decade, a step that hastened the Trump tariff policy.

Damon The emerging geopolitical tensions, commercial wars and high debt levels around the world mean that the “tectonic panels” of the global economy were turning.

“I do not know whether it was a crisis within six months or six years,” he said at the National Economic Forum of Reghan in California, and called on the organizers to reduce the restrictions imposed on banks to enhance their ability to circulate bonds. “I think we can make everything better, including, by changing and modifying some of these rules and regulations.”

His comments from the President of Goldman Sachs John and Al -Daroun, who described earlier this week the United States’s inability to be “somewhat related” and warned of its impact on the bond market is “the great danger to the macro at the present time.”

“I think we will make a completely greater deficit, as much as you can see the eye, and we will get more borrowing on the cabinet,” said Waldron, the second Goldman behind David Solomon. “The great risks are that long -term rates of support and capital cost in the growing economy are essentially more than brakes on economic growth,” he told the Bernstein Conference in New York.

The Trump budget bill will add at least $ 3.3 trillion to the US debt by 2034, according to the independent committee on the responsible federal budget. Moody’s warned that the draft law will push the United States’ deficit of 6.4 percent of GDP last year to less than 9 percent by 2035.

Damon also said that the United States must increase taxes on the preserved benefits, a ruling on the tax law that benefits from the executives of private shares.

Trump supported the idea, which has long been a target for Democrats, including former President Barack Obama. “We must impose taxes on interest,” Damon said. In response to a question about whether he is thinking about running for the position, Damon, 69, said, “If I think I could really win, which I do not think I can.”